A U.S. federal court decision on Friday over software widely used on corporate servers ruled that Novell, and not SCO Group, is the rightful owner of copyrights covering the Unix operating system.

Utah federal court judge Dale A. Kimball said in his decision that Novell could also force SCO to abandon claims it brought up in a 2003 lawsuit against IBM.

At issue in the case was which company was the rightful owner of the copyrights for Unix, an AT&T-developed operating system widely adopted by academic institutions in the 1980s and the basis for a number of operating systems, such as Sun Microsystems' Solaris.

The case also carried special significance for distributors of Linux, the open source operating system that has become increasingly popular in the computer server market, because SCO claimed Linux had borrowed heavily from Unix.

SCO had sued IBM in 2003, arguing IBM's use of Linux was a violation of SCO's copyright of Unix, which it had purchased from Novell in 1995.

But the legal battle took a turn when Novell stepped forward and argued that it, and not SCO, actually owned the Unix copyright rights, saying when it licensed Unix to SCO the copyright rights did not come with it.

Novell senior vice-president and general counsel Joe LaSala said the ruling was good news for distributors of Linux, the open-source system developed collaboratively by programmers from around the world.

"Today's court ruling vindicates the position Novell has taken since the inception of the dispute with SCO, and it settles the issue of who owns the copyrights of UNIX in Novell's favour," he said in a statement.

"The court's ruling has cut out the core of SCO's case and, as a result, eliminates SCO's threat to the Linux community based upon allegations of copyright infringement of UNIX. We are extremely pleased with the outcome."

SCO said in a statement on its website it was "disappointed" with the ruling.

"Although the district judge ruled in Novell's favour on important issues, the case has not yet been fully vetted by the legal system and we will continue to explore our options with respect to how we move forward from here," the company said in a statement.

SCO's case with IBM is still ongoing, with the judge directing both SCO and IBM to detail where their cases stand after the Novell ruling.

Novell's OpenSUSE is one of several versions of Linux in use on corporate servers, a market where the operating system has carved out a sizeable niche. According to a May 2007 report from technology analyst IDC, Linux-run servers represented 12.7 per cent of the overall server market, or $1.6 billion US for the first quarter of 2007.